Rich Brown, head of quantitative and event driven trading solutions at Thomson Reuters
"Questions that are challenging to address can be answered directly using our MarketPsych Indicators and easily incorporated into investment and trading models."
New York & London - Thomson Reuters has expanded its news analytics service to include a new psychological analysis capability that is intended to gauge market sentiment by analysing human emotion in news and social media
Thomson Reuters MarketPsych Indices (TRMIs) provides real-time psychological analysis of news and social media. Users can view and model the impact of investor psychology across asset classes and regions by analyzing the specific attitudes expressed within stories and tracking the macroeconomic themes that are most relevant to price movements in each asset class.
"Questions that are challenging to address can be answered directly using our MarketPsych Indicators and easily incorporated into investment and trading models. Questions like: 'Are there growing concerns over the stability of the Yuan's peg to the dollar, and what does this mean for the value of the currency?' or 'Is the threat of violence and conflict in Iran heightening or abating, and what does that mean for global oil prices?'," said Rich Brown, head of quantitative and event driven trading solutions at Thomson Reuters. "This new capability can be used to identify economic sector activity, asset prices, social trends and develop under-the-radar investment hypotheses."
Developed in conjunction with MarketPsych, a consultancy specialising in behavioral economics, TRMIs are delivered to financial institutions as a series of real-time indicators that can be incorporated into charting and alerting applications or in quantitative models to help support asset allocation decisions and sector rotation strategies. TRMIs are tailored to specific topics and asset classes and reflect the levels of specific psychological dimensions expressed in news and social media such as optimism, gloom, joy, fear, trust, anger, innovation, violence, conflict, stress, urgency and uncertainty, among others. TRMI also provides a set of metrics on common macroeconomic themes known to influence the prices of commodities and currencies, the growth of economic sectors, and the development of nations. For example, the feed quantifies such items as 'CropDisease' for agricultural commodities or 'CurrencyPegInstability' for foreign exchange markets.